No. 93-434 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1994 

No. 93-434 

IN THE MATTER OF THE ESTATE OF, 

JUSTIN PETERSON, also known as 

JUSTIN C. PETERSON, Deceased. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable G. Todd Baugh, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Charles F. Moses, Moses Law Firm, Billings, Montana 

For Respondent: 

James L. Jones, William A. Cole, Richard A. Brekke, 

Dorsey & Whitney, Billings, Montana 

Submitted on Briefs: February 24, 1994 

Decided: May 20, 1994 

Filed: MAY 2 0 1994 

CLERK OF SUPhi?ii~ COURT ..: ?' /,., .:? p s .+- ; -. ; ; ;ywd:,+,.~ STATE OF we I. ._) . ' : 4 

;. CFeirk 1;' 
Justice Fred 3. Weber delivered the Opinion of the Court. 

This is an appeal by Michael J. Whalen from an Order of the 

District Court of the Thirteenth Judicial District, Yellowstone 

County, removing him for cause from his duties as personal 

representative in the above-entitled informal probate proceeding. 

We affirm. 

We have restated the issues as follows: 

1. Did the District Court abuse its discretion by removing 

Michael J. Whalen as personal representative of the estate of 

Justin Peterson? 

11. Did the District Court err in appointing David Peterson, 

the sole heir, as the successor personal representative? 

111. Should the appellant be sanctioned and ordered to pay 

respondent's attorney fees and costs pursuant to Rule 32, 

M.R.App.P., for bringing a meritless appeal? 

Justin C. Peterson died on March 25, 1993 at the age of 33 

years. David L. Peterson is the younger brother of Justin C. 

Peterson, the deceased, and the sole beneficiary under Justin 

Peterson's will. Justin and David Peterson, although part of a 

large family, were raised in a series of foster homes. During part 

of their time in high school after Justin was "on his own,'' they 

lived together in a tent in a cave in the llrimsll in Billings. 

David has suffered from cerebral palsy since birth and one of his 

teachers would pick him up in the morning to take him to school 

when the boys lived in the tent. The record indicates an extremely 
close relationship between the two brothers which continued until 

Justin's death in March of 1993. 

Justin Peterson died from complications resulting from an 

accident which occurred on June 23, 1982, while swimming at Lake 

Elmo, a recreational facility in Billings. As an immediate result 

of that accident, Justin was rendered a quadriplegic, completely 

dependent on others for his care, including feeding, and he was 

unable to breathe without the assistance of a respirator or 

ventilator. Although he could talk, he spoke with difficulty. 

During the eleven years in which Justin survived following the 

accident, he endured repeated life-threatening complications. 

David lived with Justin following his release from the 

hospital in September of 1984 and was granted a limited power of 

attorney by Justin to handle household matters. Another limited 

power of attorney was given to an accountant who handled payroll 

matters and taxes for Justin. Justin needed round-the-clock care 

until the time of his death and employed nursing assistance for 

such care. Justin had been hospitalized from the date of the 

accident in 1982 until September 1984, and was able to leave the 

hospital and move into a home he had purchased only after a 

settlement was obtained for him by his attorneys. 

Ernest F. Boschert of the Boschert & Boschert law firm was 

contacted by other family members in January 1983 to represent 

Justin. Mr. Boschert subsequently associated with Michael J. 

Whalen of the Whalen & Whalen law firm to represent Justin in his 
claim against the owners of the recreational area, Kimble 

Properties and Tymon, Inc. 

On February 2, 1983, Justin signed a contingency fee agreement 

with Michael J. Whalen and Ernest F. Boschert which provided the 

following fee schedule: 

25% of the recovery if the case was settled prior to 

filing a complaint in district court; 

33 1/3% of the recovery after a complaint was filed in 

district court; 

40% of the recovery if the case was set for trial or was 

tried; and 

5% additional if the case was appealed or there was a new 

trial. 

On February 22, 1983, the law firm of Whalen & Whalen filed a 

two-page complaint against the owners of Lake Elmo. Three requests 

were made for the District Court to set a trial d.ate within the 

ensuing months of 1983. The first such request was made of the 

presiding judge in the matter, Judge Wilson, on August 16, 1983. 

Judge Wilson deemed himself disqualified and the case was assigned 

to Judge Barz. On September 2, 1983, another request was made to 

set the matter for trial ; this time, Judge Barz disqualified 

herself. The case was then assigned to Judge Speare. Timothy 

Whalen of Whalen & Whalen wrote a letter on September 7, 1983, 

again requesting that the cause be placed on the trial calendar. 

On October 17, 1983, the ~istrict Court entered an order setting a 

trial date. As a result of the foregoing actions, the amount of 

fees increased to 40% under the contingency agreement. 
On March 9, 1984, Michael J. Whalen made an offer to settle 

the case for policy limits of $2,500,000 cash or, in the 

alternative, for $1,250,000 cash and $1,875,000 to be paid in 

installments of $15,625 per month over a ten-year period, for a 

total of $3,125,000. The defendants' insurers accepted the 

alternative proposal without making a counteroffer. The final 

payments on this alternative settlement proposal will be made in 

May, 1994. 

After the 1984 settlement, Michael J. Whalen drafted a will 

for Justin Peterson in which he and Ernest F. Boschert were named 

as co-personal representatives. Ernest F. Boschert predeceased 

Justin Peterson and has not acted as personal representative. 

Following the death of Justin Peterson, Michael J. Whalen was 

appointed as personal representative of his estate. David Peterson 

obtained separate counsel and asked Michael J. Whalen to step aside 

as personal representative of his brother's estate. 

After discussions, Mr. Whalen declined to resign. On May 27, 

1993, David Peterson filed a petition to remove Michael J. Whalen 

as personal representative which is the subject of this appeal. 

After a hearing held on June 16, 1993, the District Court removed 

Mr. Whalen and appointed David Peterson as successor personal 

representative in an order dated July 20, 1993. 

David Peterson has filed a claim against the Whalen and 

Boschert firms with regard to the fee agreement. Michael J. Whalen 

filed suit against the estate of Justin Peterson (the Estate) to 
recover his legal expenses. 

Issue I. 

Did the District Court abuse its discretion by removing 

Michael J. Whalen as personal representative of the estate of 

Justin Peterson? 

In the petition for removal of Michael J. Whalen as personal 

representative of the Estate, David Peterson stated that the 

attorney fees on the part of the two law firms were excessive in 

relation to the amount of work done in connection with Justin 

Peterson's personal injury claim. 

After a hearing on June 16, 1993 to determine whether Mr. 

Whalen should be removed for cause, the District Court determined 

that a conflict of interest existed between the Estate and Mr. 

Whalen as Mr. Whalen could not be expected to pursue a claim 

against himself on behalf of the Estate. A personal representative 

may be removed for cause in certain situations under 5 72-3-526, 

MCA, which provides in pertinent part: 

72-3-526. Termination of appointment -- removal for 

cause. (1) A person interested in the estate may 

petition for removal of a personal representative for 

cause at any time. Upon filing of the petition, the 

court shall fix a time and place for hearing. Notice 

shall be given by the petitioner to the personal 

representative and to other persons as the court may 

order. . . . (2) Cause for removal exists: 

(a) when removal would be in the best interests of 

the estate; or 

(b) if it is shown that a personal representative or 

the person seeking his appointment intentionally 

misrepresented material facts in the proceedings leading 

to his appointment or that the personal representative 

has disregarded an order of the court, has become 
incapable of discharging the duties of his office, or has 

mismanaged the estate or failed to Derform anv dutv 

pertainins to the office. (Emphasis supplied.) 

Removal of a personal representative for cause pursuant to 8 72-3- 

526, MCA, is within the sound discretion of the district court and 

this Court will not overturn such a termination unless there is a 

clear abuse of discretion. In re the Estate of Nelson (1990), 243 

Mont. 276, 278, 794 P.2d 677, 678. A district court can remove a 

personal representative or refuse to appoint a person as personal 

representative for cause if there is a conflict of interest between 

that person's interests and those of the estate. In re the Estate 

of Obstarczyk (1963), 141 Mont. 346, 351-53, 377 P.2d 531, 534-35. 

The District Court expressly relied on Estate of Obstarczvk, 

which affirmed a removal of an executrix on the grounds that her 

interests were adverse to the estate and held as follows: 

. . . The duty of an executor is to examine strictly 

all claims against an estate . . . seeking judicial 

interpretation if necessary. . . . It is clear that [the 

executrix's] own interests are antagonistic to the 

estate. 

In the Tice case, supra, we quoted with approval 

from In re Rinio's Estate (1933), 93 Mont. 428, 435, 19 

P.2d 322, 325, as follows: 

"* * * The law does not look with favor upon the 

administration of estates by a person where 

conflicts in the performance of his duty are likely 

to arise." 

Estate of Obstarczvk, 377 P.2d at 534. We conclude that the 

potential claim against Michael J. Whalen for excessive attorney 

fees is sufficient to create a conflict of interest in this case. 
A conflict of interest is sufficient for removal of the personal 

representative for cause under § 72-3-526, MCA. 

We hold the District Court properly exercised its discretion 

in determining that it was in the best interests of the Estate to 

remove Michael J. Whalen as personal representative. 

Issue 11. 

Did the District Court err in appointing David Peterson, the 

sole heir, as the successor personal representative? 

Mr. Whalen also contends that David Peterson was not a proper 

person for appointment as successor personal representative of the 

Estate. Although Mr. Whalen testified as noted above that he would 

not pursue a claim against himself, he stated that he was willing 

to have a special administrator appointed to explore that claim if 

the court denied his motion to dismiss David Peterson's petition to 

remove him as personal representative. 

Section 72-3-527, MCA, provides that parts 2 and 3 of Chapter 

72 govern proceedings for appointment of a successor personal 

representative to succeed one whose appointment is terminated; 

thus, 5 72-3-502, MCA, governs here and provides as follows: 

72-3-502. Priorities for appointment. Whether the 

proceedings are formal or informal, persons who are not 

disqualified have priority for appointment in the 

following order: 

(1) the person with priority as determined by a 

probated will, including a person nominated by a power 

conferred in a will; 

(2) the surviving spouse of the decedent who is a 

devisee of the decedent; 

(3) the custodial parent of a minor decedent; 

(4) other devisees of the decedent; 

(5) the surviving spouse of the decedent; 

(6) other heirs of the decedent; 
(7) public administrator; 

(8) 45 days after the death of the decedent, any 

creditor. 

We review the appointment of a personal representative according to 

3 72-3-502, MCA, to determine whether a district court has 

correctly interpretedthe law. Steer Inc. v. Department of Revenue 

(lggO), 245 Mont. 470, 474-75, 803 P.2d 601, 603. We conclude that 

under the order of priority set forth in 3 72-3-502, MCA, David 

Peterson has first priority of appointment as there exist no 

persons fitting the descriptions of subsections (1) through (3) and 

he is the sole devisee under his brother's will. Further, he will 

serve as personal representative at no charge and as noted by the 

District Court, a special administrator would increase costs 

unnecessarily. 

Moreover, 5 72-3-503 (I), MCA, provides that an objection to 

the appointment of a personal representative can be made & in 

formal proceedings. Justin C. Peterson's will is being informally 

probated. On that basis, Mr. Whalen may not object to the District 

Court's appointment of David Peterson as personal representative of 

the Estate. 

We hold the District Court properly appointed David Peterson, 

the sole heir, as the successor personal representative of the 

estate of Justin C. Peterson. 

Issue 111. 

Should the appellant be sanctioned and ordered to pay 

respondent's attorney fees and costs pursuant to Rule 32, 

M.R.APP.P., for bringing a meritless appeal? 
David Peterson contends that this Court should assess 

sanctions against Mr. Whalen and his attorneys for bringing a 

meritless appeal. He further claims that it was brought for an 

improper purpose. Thus, he asks this Court to require Mr. Whalen 

to reimburse him for his reasonable costs and attorney fees 

incurred in connection with this appeal. 

On the record before us we hold there is no basis for 

sanctions to be assessed against the appellant for attorney fees 

and costs pursuant to Rule 32, M.R.App.P., for bringing a meritless 

appeal. 

Affirmed. 

We Concur: 

, Justices 

Justice William E. Hunt, Sr., and Justice Terry N. Trieweiler 

did not participate. 
to the